Oil Prices Rise on Tanker Explosion in Saudi Arabia
EghtesadOnline: Oil prices rose on Monday, pushing Brent back above $50 a barrel, buoyed by hopes that a rollout of coronavirus vaccines will lift global fuel demand while a tanker explosion in Saudi Arabia jangled nerves in the market.
Brent crude futures for February rose 67 cents, or 1.3%, to $50.64 a barrel, while US West Texas Intermediate crude futures for January were up 62 cents, or 1.3%, at $47.19 a barrel, CNBC reported.
Prices also extended gains amid supply jitters after a shipping firm said an oil tanker was hit by an external source while discharging at Jeddah port in Saudi Arabia.
“The market is assessing supply disruption from these incidents versus Iranian supply volumes coming back,” Energy Aspects’ analyst Virendra Chauhan said, adding that the rampant spread of the virus in the west has hurt demand. “So it’s unsurprising that prices are choppy.”
Brent and WTI have rallied for six consecutive weeks, their longest stretch of gains since June. The United States kicked off its vaccination campaign against Covid-19, buoying hopes that pandemic restrictions could end soon and lift demand at the world’s largest oil consumer.
An extension of Brexit talks among European powers also buoyed financial markets on Monday.
CMC Markets’ chief markets strategist Michael McCarthy asked: “Having ‘bought the rumor’ of an effective vaccine, now that delivery is here will investors ‘sell the fact’?”
Major European countries continued in lockdown mode to curb the spread of Covid-19 which has reduced fuel demand.